contemplating the intersection of work, the global economy, and Christian mission

Sep 08, 2008

Prosperity: Human Capital

Our third component in the cycle of prosperity is human capital. In this context, I’m defining Human capital is the physical, mental, and spiritual wherewithal to conduct economic labor. Arrows B, E, G and K are the inputs into human capitalArrow B

We noted earlier that people and their environment are the two basic components of any economic system. No people, no economy. No food, no people. Throughout most of human history, the every day lives of the overwhelming majority of humanity has been focused on securing enough food to sustain survival. Economist Robert Fogel estimates that farming first emerged about 11,000 years ago, freeing about ten percent of the population from agricultural labor. This was the start of the first agricultural revolution.

About 5000 BCE, farming replaced hunting and gathering as the primary means of food production on a worldwide basis. About 4300 BCE, we find evidence of the first irrigation efforts and shortly thereafter the first cities began to emerge. Metallurgy and the advent of writing came a few centuries after that. Mathematics emerged around 2,000 BCE. Then came the invention of the iron plowshare around 1000 BCE. Agriculture become even more productive with fewer people needed for agricultural production. I’ve already alluded to the discovery of improved crop rotation methods late in the first millennia and the invention of the teardrop shaped horse collar around 1000 CE. With each improvement in farming techniques we also tend to see modest increases in population.

The second agricultural revolution dates back to the 16th and 17th Centuries. Rediscovery of Classical knowledge after the fall of Constantinople, the rise of scientific study, the discovery of new crops and techniques from the New World, and the improved exchange of all this information due to the printing press, led to agricultural improvement. The ndustrial revolution that emerged in the early 19th Century also had a major impact on improving agricultural production.

The achievement of a steady sustainable food supply in the West has had at least these impacts

1. Few people are now needed to work in agricultural production which means most are free to pursue other life choices.

2. People are taller, bigger, and more powerful with more stamina. People are healthier and better able to resist illness and disease. They’re able to more fully develop and use their minds and be more productive.

3. People are able to live significantly longer. Not only are people able to become more specialized and productive but they can be more specialized and productive over a longer stretch of years.

4. Sufficient food supply has lessened one of the pressures that has frequently led to war and death.

Arrow E

Here is a quick review of some observations that I highlighted in the post on technology.

Medical – Medical knowledge and techniques, that lengthens lives, eliminates diseases, repairs injuries and in general leads to more people living satisfying productive lives.

Shelter – Human dwellings and communities that protect people from natural threats, sanitary living conditions, and declining level of pollutions per amount of production. Electricity has made possible lighting and other amenities that free human activity from the restrictions of daylight.

Communication – Literacy and the whole panoply of communication tools make incomprehensibly large volumes of information available to billions of people improving learning and leisure opporunties.

Transportation – Transportation technologies have shrunk the world, bringing more people into closer proximity. Delivery of goods to one’s doorstep, from the essential to the frivolous, is now an unremarkable reality and transportation opens a wider range of employment and living options.

Labor Saving and Entertainment Enhancing Devices – Consumer products have decreased the time and labor required for a variety of tasks and they have enabled people to indulge personal interests and passions in ways that are historically unprecedented.Arrow G

Economic growth and wealth enables people to purchase goods and services that will improve their physical, mental, and spiritual lives, thus improving human capital. It frees children from the need to be laborers so they can devote their time education and maturing. It allows people to work forty hours a week instead of the sixty-six hour week of 150 years ago. It is allows seniors to spend their twilight years in more leisurely pursuits. It also makes resources available for serving others through not-for-profit ventures.Arrow K

Trade with other societies results in exchanges of knowledge and ideas that can be used to improve human health and general well-being.

There are two significant outputs from human capital.Arrow C

People with better diets and more fully rounded lives are more productive and generate more goods and services, increasing wealth.

Arrow H

Improved human capital (physical, mental, spiritual) produces more people able to apply themselves to generating new technologies and effectively using existing ones.